Post-Covid, the sustained demand for digital commerce will exacerbate any weaknesses in retailers’ ecommerce systems, making this the right time to consider whether your business needs to replatform to take full advantage of changed consumer purchasing behaviour in the long term.
Astound Commerce’s point-by-pointguide examines what retailers must consider to ensure they make the right decisions around replatforming and can then manage these projects efficiently and effectively.
Online demand is looking strong; figures from the ONS suggest ecommerce sales grew 46% in 2020 – the biggest rise in over a decade. As a percentage of total retail sales, online now accounts for an increasing proportion of retailers’ revenue, rising to 24.7% by January 2021.
However, online retailers hoping for a further sales bonanza may be disappointed.
While consumer demand for digital looks like it will hold up, competition will intensify – companies that had previously relied on stores for the bulk of their sales have already ramped up their online capabilities, while those already operating in the ecommerce sphere have invested in enhancing digital capabilities. Add to this the increased number of brands that are now either selling direct or plotting their Direct-To-Consumer (D2C) strategy, amply assisted by new D2C channels, such as TikTok, which give brands direct access to millions of new customers.
Successful companies have learned positive lessons from Covid, but what about yours? It may be that during the pandemic, your website held up as retail shifted online, but what about your order management systems or customer service capabilities? How did your fulfilment network perform, and can it sustain the increased levels of demand in the long term?
Citizens Advice saw a trebling in complaints about late deliveries in 2020 as retailers lost control of the last mile to their courier partners, often leaving the shopper in a communications blackhole or, worse, failing to fulfil altogether. And several retailers had to publicly apologise for poor customer service during the pandemic, which resulted in late deliveries and returns refunds, negatively impacting customer experience and ebbing away at hard-won loyalty. Regulators even told retailers to stop blaming Covid for poor service, with Deloitte noting that the market capitalisation of companies hit by scandal or other bad news can lag behind their competitors by as much as 74% in the following two years.
The right technology and level of digitalisation are essential to managing orders efficiently and profitably and delivering the customer experience that consumers have expected for some years, but more than ever since the pandemic accelerated and sustained demand for ecommerce.
The most important question the retailer must address up front is what are the main objectives for replatforming? It is almost certain that different stakeholders within the business – from ecommerce to IT, marketing and operations – will have different objectives and may not agree on the priorities for replatforming. Canvassing all opinions is important as is strong leadership to impose a single strategy that may not satisfy all those decision makers but is right for the business as a whole. Consultation will ensure support from those stakeholders that are fully on board, and it will also uncover the weaknesses in current systems and processes, allowing those to be addressed in tandem with the replatforming project.
Buy in, or lack thereof, can be complex because it may reflect a clash of working methods. For instance, the CFO must, of course, be onboard, but may be wedded to fixed costs contracts where you will almost certainly need to introduce an agile development model to ensure that solutions keep pace with changing requirements.
Ask is your business ready? The team that needs to be brought together to execute well will come from both internal sources as well as the systems integrator (SI) who may well lack the resources or experience with the platform that is your ideal choice. This means that the SI may be comfortable with a more ecommerce-focused approach than one that is right for your business if, for example, you are opting for Headless capabilities where IT, rather than ecommerce, gets to take more of a lead in development.
Discussions about who leads and how you work with SIs and partners, all of whom must be fully apprised of your plans, must all serve the greater master – the customer. The objective of replatforming is higher sales, metrics should be agreed in advance, and this demands focus on a number of areas that are important to them.
Firstly, it is quite easy to build what it is assumed the customers want, based on the limitations of the current platform, when in fact it is better to involve them and refer back to them continuously. How easy is the online buying journey that the customer will make? It is common to build silos of excellence on the journey without getting the whole journey right? Is the solution optimised for each channel and can it seamlessly integrate customer experience across channels and devices? It has to work well across each sales channel, including social and mobile which now accounts for more than half of online sales and 60-70% of search.
It’s crucial to remain platform agnostic at this stage, so whether it’s Shopify, headless or a more traditional model, ensure you select the platform that can deliver the right solutions for all elements of your business.
Will the new platform be able to provide a single view of customers, orders, and stock across all channels? This is now critical to success as the number of channels grow and others change their roles, such as ‘store as warehouse’ to fulfil online orders.
Still thinking about the customer, the new platform should enable a long reach, far beyond the initial sale to build loyalty and to make it easy for the customer to enjoy further benefits, including vouchers, personalised experiences, and reward programmes.
The customer is taking greater control of their shopping experiences so the website platform must be more immersive and enable them to manage their experience. This may be as simple as choice, offering a range of payment options – credit and debit cards, PayPal, Google Pay, and Buy Now Pay Later, such as Klarna.
Dealing with these dynamics upfront will make for a smoother project and leave breathing space for the escalations that are an inevitable part of any replatforming. All the good work that has been done on the current platform needs to be safely migrated, SEO for instance. And the switchover needs to be quick and free of mistakes so there is no loss of momentum or, more importantly still, sales.
Ultimately, the decision should be driven by what is happening in the market. First, retail sales are set to grow only by a modest 2.4% in 2021. And the big bonus ecommerce retailers got in 2020 as retail shifted online will diminish as stores reopen. And yet, with more and more consumers saying they will continue the online behaviours they learned during the pandemic, the opportunity for growth is there for brands able to catch the wave. Will that be you?
Gita Samani, Consulting Director, Astound Commerce